Sen. Cynthia Lummis, R-Wyo., introduced legislation to overhaul tax treatments of digital assets, including cryptocurrencies. The bill is the latest push in Congress to change federal treatment of digital assets ranging from Bitcoin to dollar-pegged stablecoins, with a comprehensive stablecoin financial regulation bill likely to become law this week.
The bill is similar to tax sections of comprehensive regulatory reform legislation Lummis has co-authored in previous congresses. Several of the changes would be favorable to industry and retail owners of digital assets, though the bill would also revise wash-trading rules to cover digital assets for tax purposes.
The bill would create a $300 de minimis exception for digital assets transactions and gains. There would be a $5,000 annual cap on utilizing the exception, with inflation adjustment for both thresholds beginning in 2026.
The Wyoming Republican’s bill would also establish a new tax category for digital asset mining and staking, activities that enable the maintenance of a blockchain and result in asset disbursement. Mining and staking income would not be recognized until the sale of those assets and would be taxed as ordinary income.
If enacted, digital asset lending agreements would also not be treated as taxable events. The bill would also create income recognition rules for lenders. Digital asset dealers would be required to apply mark-to-market tax treatment to their transactions, similar to securities dealers, though election would be optional for traders.
Separately, the Oversight Subcommittee of the House Ways and Means Committee will hold a July 16 hearing on tax policy for digital assets.
GENIUS Act House vote this week
The GENIUS Act (S. 1582), a bill aimed at setting comprehensive rules around stablecoins, a type of digital asset pegged in value (often to U.S. dollars) is expected to receive a vote before the entire House of Representatives this week. The bill passed the Senate by a bipartisan vote of 68-30 on June 17. House Republican leadership has signaled they do not want to amend the bill further, meaning House passage would allow it to go directly to President Donald Trump’s desk to be signed into law.
The bill includes audit and public disclosure requirements for reserves used to back stablecoins in order to maintain their redemption value.
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